House Affordability Calculator
Find the highest home price your income supports under the 28/36 rule or FHA and VA limits, including tax, insurance and PMI, and see which limit holds you back.
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About this toolWhat is the House Affordability Calculator?
The House Affordability Calculator works backwards from your income. Enter gross annual income, your existing monthly debt payments, the cash you have for a down payment, and the loan rate and term. It finds the most expensive home whose full monthly cost (principal, interest, property tax, insurance, PMI and HOA dues) still fits within the debt-to-income limits you choose.
It also tells you which limit is doing the limiting. If the front-end ratio binds, your income caps the budget; if the back-end ratio binds, your car loan or student loans are what hold the price down, and paying them off would raise it. A table shows how the maximum price moves if rates are half a point or a point higher or lower.
The limits are presets for the classic 28/36 rule, a more cautious 25/33 budget, typical FHA (31/43) and VA (41%) ratios, a 45% stretch, or your own numbers.
- Solves for the highest price, not just a payment
- Includes property tax, insurance, HOA and PMI below 20% down
- Shows whether the front-end or back-end ratio binds
- Presets for 28/36, 25/33, FHA 31/43, VA 41% and custom limits
- Rate sensitivity table from one point lower to one point higher
How to use the House Affordability Calculator
- Enter gross annual income for everyone on the loan, and the total of your monthly debt payments (not rent, not utilities).
- Enter the cash you will put down, the expected interest rate and the loan term.
- Set the property tax rate, yearly home insurance, HOA dues and the PMI rate used when you put down less than 20%.
- Pick a guideline or type your own front-end and back-end limits. A front-end limit of 0 means only the total debt ratio applies.
- Read the maximum price and the binding-limit note, then use the rate table to see how sensitive the answer is.
Worked examples
A 120,000 household under 28/36
Input
Income 120,000; debts 500 a month; 60,000 down; 6.5% for 30 years; tax 1.1%; insurance 1,800
Output
Maximum price 399,038; loan 339,038; payment 2,800.00
28% of 10,000 monthly income is 2,800, and the back-end limit would allow 3,100, so the front-end ratio binds. The payment includes 141.27 of PMI because 60,000 is only 15% of the price.
Same household with a car and student loans
Input
As above but 1,500 of monthly debts
Output
Maximum price 307,583; back-end ratio binds at 2,100 for housing
Another 1,000 of monthly debts cuts the budget by about 91,000 of house. Paying off a car loan before applying can do more for buying power than a bigger down payment.
FHA style limits
Input
Original inputs with 31/43
Output
Maximum price 438,233
Higher ratios mean a higher price, but also a payment that takes 31% of gross pay. Programs allowing a ratio do not make it comfortable.
Background and insight
Lenders judge affordability with two debt-to-income ratios. The front-end (housing) ratio is the new housing payment divided by gross monthly income. The back-end ratio adds every other required debt payment, such as auto, student and personal loans and card minimums. The 28/36 guideline says housing should stay under 28% of gross income and all debts under 36%.
Those percentages are rules of thumb rather than law. Fannie Mae's Selling Guide caps manually underwritten conventional loans at a 36% total ratio, or 45% with strong credit and reserves, and allows up to 50% through its automated Desktop Underwriter. HUD's handbook uses 31% and 43% for manually underwritten FHA loans, and VA uses a 41% guideline together with a residual income test. Lenders can be stricter.
The search is done numerically: the calculator raises the price until the monthly cost would exceed the budget, recomputing tax as a percentage of each trial price and adding PMI whenever the loan is more than 80% of it. That is why adding PMI at 15% down can lower the price more than you might expect.
Common use cases
Setting a search budget
Know the price ceiling before you look at listings or talk to an agent.
Deciding whether to pay off debt first
See how much house each monthly debt payment costs you when the back-end ratio binds.
Comparing down payment plans
Test 10%, 15% and 20% down and watch how PMI changes the answer.
Preparing for pre-approval
Estimate what a lender is likely to approve and where you sit against FHA and conventional ratios.
Tips and limitations
- Use gross (pre-tax) income because that is what lenders use, but sanity-check the payment against your take-home pay.
- Count debts the way a credit report shows them: the minimum card payment, not the balance.
- The maximum is a ceiling. Leave room for maintenance, which many owners budget at around 1% of the home value a year, and for closing costs.
- A one-point rise in rate removed about 27,000 from the default budget. Get a rate quote before you fall in love with a price.
- This is an estimate based on ratios. It is not a pre-approval and ignores credit score, reserves and lender overlays.
Frequently asked questions
How much house can I afford on a 100k salary?
Under the 28/36 rule, 100,000 of gross income allows about 2,333 a month for housing, provided your other debts are under about 667 a month. With 20% down at 6.5%, 1.1% property tax and typical insurance, that supports a price of roughly 345,000. Enter your own debts and down payment for a precise figure.
What is the 28/36 rule for buying a house?
It is a budgeting guideline: spend no more than 28% of gross monthly income on housing (principal, interest, taxes, insurance, PMI and HOA) and no more than 36% on all debt payments combined. Lenders use similar ratios, though many approve higher back-end ratios for strong applicants.
Which limit stops me buying a more expensive house?
The calculator labels it. If the front-end ratio binds, your income is the limit and only a higher income or lower rate will raise the price. If the back-end ratio binds, your existing debts are the constraint, and every 100 a month of debt you clear adds roughly 100 a month of housing budget.
Does the affordability calculator include closing costs?
No. It assumes the whole down payment goes toward the price. Closing costs are paid on top, so set aside separate cash for them and reduce the down payment field if that money comes out of the same savings.
Why does a smaller down payment lower my maximum price so much?
Two reasons: you borrow more for the same price, and below 20% down PMI is added to the monthly cost. Both eat into a fixed monthly budget, so each dollar of down payment you remove takes more than a dollar off the price you can afford.
Are FHA and VA debt-to-income limits higher than conventional?
Their headline ratios are. Manually underwritten FHA loans typically use 31% and 43%, and VA uses 41% plus a residual income check. Automated underwriting for any program can approve higher ratios when credit, savings or other factors are strong, so treat these presets as typical, not guaranteed.
Is there an in-depth guide to the House Affordability Calculator?
Yes. “Mortgage Maths: Payments, PMI, Affordability, Refinancing and APR” covers the background, how it works, common pitfalls and worked examples. Read the full guide.
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